WTI eyes 3-week lows near $ 63 ahead of EIA data

• Looks vulnerable below $ 63.
• Rising US output offsets bullish API report.
• The US EIA inventories report in focus.

WTI (oil futures on NYMEX) is back in the red zone this Wednesday, after a temporary reversal seen a day before from 3-week lows, as the bulls failed to sustain the recovery mode above the $ 64 threshold.

The recovery in prices was mainly driven by an unexpected drawdown in the US crude stockpiles, as showed by the API data late-Tuesday. According to the API report, the US crude inventories fell by 1.1 million barrels in the week to Feb. 2 to 418.4 million barrels.

However, the bullish crude inventory report was overshadowed by the ongoing surge in the US output levels. Reuters reports that the US EIA expects the US output to rise to an average of 10.59 million bpd in 2018, and then 11.18 million bpd by 2019.

Meanwhile, experts’ warnings that weaker seasonal demand for the commodity also added to the renewed weakness seen in the barrel of WTI over the last hour. All eyes now remain on the official US government crude inventories report lined up for release in the American session for fresh direction on the prices.

At the time of writing, WTI trades flat at $ 63.35 while Brent also trades little changed near $ 67.

WTI Technical Levels

The resistances are aligned at $63.76 (daily pivot) ahead of $64.37 (5-DMA) and $64.62 (20-DMA). On the downside, supports are located at $ 63.12 (3-week low), $62.60 (classic S2/ Fib S3) and $61.87 (50-DMA).